i nvestment a dvisory s ervices: b roker/ d ealer

Investment Advisory Services:

Broker/Dealer

Karl Schwab, CFAFTN Financial

CMTA ConferenceApril 22, 2004

Discussion Topics

1. Investment goals

2. Factors influencing investment decisions

3. Choosing the relationship

4. Portfolio management tools

5. What to expect from your “advisor”

Investment Goals

• Preservation of principal• Protect

• Taxpayers• Debt-holders

• Income Generation• Fund ongoing services• Cover debt service• Meet emergency needs

Discussion Topics

1. Investment goals

2. Factors influencing investment decisions

3. Choosing the relationship

4. Portfolio management tools

5. What to expect from your “advisor”

Factors influencing investment decisions

• Current level of interest rates • Cash flow and budget requirements

• Risk tolerances

• Investment policy – state and local laws

• External Influences

Discussion Topics

1. Investment goals

2. Factors influencing investment decisions

3. Choosing the relationship

4. Portfolio management tools

5. What to expect from your “advisor”

Choosing the relationship

• Active / Passive investment management

• Advisor “track record”

• Approval process and documentation

Choosing the relationship

• Pay as you go

• Sector specific research and information

• Strategies, ideas, and trade execution

• Compete for your transactions

Broker / Dealer Direct Investment - Defined

Broker / Dealer Direct Investment

Municipality

Broker / Dealer

Broker / Dealer Broker / Dealer

AdviceAdvice

Advice

Trade

Trade

Trade

Choosing the relationship

• Market knowledge

• Product / Sector insight

• Closer to the market / can underwrite issues

• Independent of process

Broker / Dealer Direct Investment - Advantages

Choosing the relationship

Broker / Dealer Direct Investment - Advantages

Discussion Topics

1. Investment goals

2. Factors influencing investment decisions

3. Choosing the relationship

4. Portfolio management tools

5. What to expect from your “advisor”

Portfolio Management Tools

• Essential analytics• Online portfolio tools

Information to make the right decisions

Portfolio Management Tools

Information to make the right decisions

Portfolio Management Tools

Information to make the right decisions

Portfolio Management Tools

Information to make the right decisions

Portfolio Management Tools

Information to make the right decisions

• Essential analytics• Online portfolio access

• CMS Bondedge• Yieldbook• Bloomberg

Portfolio Management Tools

• Essential analytics

• Portfolio accounting

Information to make the right decisions

Portfolio Management Tools

Information to make the right decisions

Portfolio Management Tools

• Tailored to the objectives of the municipality

• Based on the current portfolio structure

• Both strategic and tactical trade ideas

Strategies and Trade Ideas

Portfolio Management Tools

Strategies and Trade Ideas

Portfolio Management Tools

• Economic Research • Government Agencies • Corporate Bonds

Investment Research – Industry Leaders

Portfolio Management Tools

Investment Research

Portfolio Management Tools

Investment Research

Discussion Topics

1. Investment goals

2. Factors influencing investment decisions

3. Choosing the relationship

4. Portfolio management tools

5. What to expect from your “advisor”

What to expect from your advisor relationship

• Quality coverage based on needs• Proven Firm with knowledgeable representatives

• Trade execution for quality ideas & service• Customized Agency underwriting• Market making leadership in Agency debt

Broker / Dealer Direct Investment

What to expect from your advisor relationship

• Access to customized analytics and reporting

• Distribution of research and information flow• Access to Economist and Analyst

Broker / Dealer Direct Investment